HomeNewsTC Energy Files to Reduce Toll on Canadian Mainline Pipeline

TC Energy Files to Reduce Toll on Canadian Mainline Pipeline

12/20/2019

(P&GJ) — TC Energy Corp. on Friday said its TransCanada PipeLines unit has reached an agreement with struggling producers to reduce tolls on the western part of the Canadian Mainline pipeline and asked regulators to approve the rates quickly. 

Maple Compressor station, in Canada, is part of TC Energy’s Canadian Mainline natural gas pipeline system. (photo: TC Energy)

The Calgary-based operator said an application was filed with the Canada Energy Regulator (CER) seeking approval of the six-year negotiated and unanimously supported settlement with its customers and other interested parties on Canadian Mainline tolls. It requested timely approval before terms come into effect in January 2020.

The 8,761-mile (14,100-km) Canadian Mainline primarily transports Western Canadian Sedimentary Basin (WTSB) natural gas for delivery across the Canadian provinces and to markets in the United States and Eastern Canada.  Western Canadian producers have been struggling through a period of low gas prices due to overproduction and strong competition from U.S. shale basins.

“This settlement is the product of a comprehensive collaborative process of engagement and negotiation with our Canadian Mainline customers. It enhances competitiveness and provides toll certainty for our customers while maintaining stable revenue for TC Energy,” Russ Girling, TC Energy’s president and CEO said in a statement. “The settlement highlights the continued importance of the Canadian Mainline, and we appreciate the efforts of industry to work with us to create innovative solutions that utilize this critical transportation link to enhance the long-term success of the WCSB.”

The settlement is designed to facilitate cost-effective transportation of natural gas from the WCSB. According to TC Energy, the agreement: 

  • encompasses a six-year term from January 2021 through December 2026;
  • sets an equity return of 10.1 per cent on 40 per cent deemed common equity, subject to variance depending on actual operating costs and natural gas throughput;
  • sets tolls for the term for separate segments of the Canadian Mainline, including a 20 per cent reduction from existing tolls on the western portion of the system that includes the path from Empress to Emerson;
  • includes a sharing mechanism incenting TC Energy to achieve cost efficiencies and increased revenues; and
  • affirms TC Energy’s pricing flexibility and allows new market-driven services to enhance flexibility to respond to changing market conditions.

The full application is available for viewing on the CER website.

 

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